Gosha et al v. Bank of New York Mellon Corporation et al

Filing 133

OPINION AND ORDER: The Court GRANTS Defendant BANAs First Request for Judicial Notice [#76] and DENIES its Second Request for Judicial Notice [#96]. The Court also GRANTS Defendants Motions to Dismiss [#75, #79] and DISMISSES Plaintiffs Second Amended Complaint with prejudice. Signed on 12-13-2016 by Judge Anna J. Brown. See attached 31 page OPINION AND ORDER for full text. (bb) Modified on 12/13/2016 (bb).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

GARY C. GOSHA and KIT M.
GOSHA,
Plaintiffs,
v.
THE BANK OF NEW YORK MELLON
CORPORATION fka THE BANK OF
NEW YORK, AS TRUSTEE (CWALT
2005-72), Delaware
Corporation; BANK OF AMERICA
N.A., a Delaware Corporation;
BAYVIEW LOAN SERVICING LLC, a
Florida Corporation; CLEAR
RECON CORP, a California
Corporation,
Defendants.

GARY C. GOSHA
KIT M. GOSHA
175900 S.W. Cheyenne Way
Tualatin, OR 97062
503-522-6571
Plaintiffs, Pro Se

1 - OPINION AND ORDER

3:16-CV-00073-BR

OPINION AND ORDER

PETER J. SALMON
Aldridge Pite, LLP
4375 Jutland Dr.
Suite 200
San Diego, CA 92117
[phone]
Attorneys for Defendants Bank of New York Mellon Corp.,
Bayview Loan Servicing LLC, and Clear Recon Corp.
JAMES P. LAURICK
Kilmer Voorhees & Laurick, PC
732 N.W. 19th Ave.
Portland, OR 97209
(503-224-0055
Attorneys for Defendant Bank of America
BROWN, Judge.
This matter comes before the Court on (1) the Motion (#75)
to Dismiss Plaintiff’s Second Amended Complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6) and First and Second
Requests for Judicial Notice (#76, #96) filed by Defendant Bank
of America N.A. (BANA) and (2) the Motion (#79) to Dismiss
Plaintiffs’ Second Amended Complaint pursuant to Federal Rule of
Civil Procedure 12(b)(6) filed by Defendants Bank of New York
Mellon Corp. (BONYM), Bayview Loan Servicing LLC, and Clear Recon
Corp. (CRC).
For the reasons that follow, the Court GRANTS Defendants’
Motions to Dismiss, GRANTS BANA’s First Request for Judicial
Notice, and DENIES BANA’s Second Request for Judicial Notice.

BACKGROUND
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For purposes of Defendants’ Motions only, the following
facts are taken from Plaintiffs’ Second Amended Complaint and are
undisputed unless otherwise noted.
On October 24, 2005, Plaintiffs obtained a loan from
America’s Wholesale Lender (AWL) in the amount of $320,000 to
refinance their home in Tualatin, Oregon.

Plaintiffs signed an

Adjustable Rate Note for the loan, which identified AWL as the
lender.

Plaintiffs secured the Note by signing a Deed of Trust

the same day.

The Deed identified Plaintiffs as the “Borrower,”

AWL as the “Lender” and “a corporation organized and existing
under the laws of New York,” Ticor Title as the “Trustee,” and
Mortgage Electronic Registration Systems, Inc. (MERS) as the
“beneficiary” and “nominee for Lender and Lender’s successors and
assigns.”
In December 2005 Plaintiffs received notice that the
servicing of their loan would be handled by Countrywide Home
Loans, Inc.

Sometime thereafter BANA assumed the servicing of

Plaintiffs’ loan.
From December 2005 through August 2011 Plaintiffs made
payments to Countrywide or BANA.

Plaintiffs allege they became

increasingly concerned with their rising monthly payments and
wanted to “refinance or modify the loan to a fixed amount.”
August 2011 Plaintiffs sought assistance from BANA for this
purpose.

3 - OPINION AND ORDER

In

In September 2011 Plaintiffs stopped making payments on the
loan.

In October 2011 BANA sent Plaintiffs a “Notice of Intent

to Accelerate and Foreclose” their loan.
In November 2011 Plaintiffs filed for Chapter 7 bankruptcy.
In December 2011 and January 2012 Plaintiffs “wanted to
reaffirm” their loan and again sought help from BANA.
On February 10, 2012, MERS, as nominee for AWL, assigned all
of the beneficial interest in the Deed to BONYM.

On February 28,

2012, the Assignment was recorded.
In March 2012 Plaintiffs were discharged in bankruptcy.
In a letter dated April 24, 2013, Plaintiffs were notified
the servicing of their loan would be transferred from BANA to
Bayview effective May 16, 2013.
On January 30, 2015, Bayview sent Plaintiffs a notice of
intent to foreclose the loan.

The notice stated the foreclosure

would be conducted in the name of BONYM.
In March 2015 Bayview asked Plaintiffs to participate in the
Oregon Foreclosure Avoidance Program (OFAP).
In June 2015 Plaintiffs and Bayview, as the agent of BONYM,
participated in a resolution conference with the OFAP mediator.
The parties did not reach an agreement for a foreclosureavoidance measure.

The mediator issued a Certificate of

Compliance over Plaintiffs’ objection.
On April 23, 2015, Bayview prepared and executed an

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“Assignment of Deed of Trust” assigning the Deed from
“Countrywide Home Loans, Inc, dba America’s Wholesale Lender,
(Assignor)” to BONYM.

The Assignment was recorded on May 1,

2015.
On August 31, 2015, BONYM, acting through Bayview as the
loan servicer, executed an “Appointment of Successor Trustee”
appointing CRC as trustee in the place of Ticor Title.

The

Appointment was recorded on September 11, 2015.
On September 9, 2015, CRC issued a “Notice of Default and
Election to Sell” for Plaintiffs’ property.

The Notice was

recorded on September 11, 2015, and Plaintiffs were served with
the Notice on September 15, 2015.
On September 16, 2015, Plaintiffs sent a letter to CRC
disputing the Notice of Default and requested copies of loanrelated documents.
On November 10, 2015, Plaintiffs sent a “Notice of
Rescission of Loan” to Bayview.
On January 6, 2016, Bayview responded to Plaintiffs’ Notice
and advised Plaintiffs that the period to rescind the October
2005 loan had expired.
On January 15, 2016, Plaintiffs filed their Complaint in
this Court.

On May 23, 2016, Plaintiffs filed a Second Amended

Complaint in which they:

(1) request a declaratory judgment

against all Defendants; (2) allege Defendants BONYM and Bayview

5 - OPINION AND ORDER

violated the Oregon Unlawful Trade Practices Act (OUTPA), Oregon
Revised Statutes, Chapter 646; (3) allege all Defendants violated
the Racketeer Influenced and Corrupt Organizations Act (RICO), 18
U.S.C. §§ 1961, et seq.; (4) allege all Defendants violated
Oregon Racketeer Influenced and Corrupt Organizations Act
(ORICO), Oregon Revised Statutes, §§ 166.175 to 166.735;
(5) allege Defendants BANA and BONYM violated the Consumer Credit
Protection Act (CCPA), 15 U.S.C. §§ 1601, et seq.; and (6) allege
promissory estoppel applies against BANA.
On June 6, 2016, Defendants filed their Motions to Dismiss
all of Plaintiffs’ claims for failure to state a claim.

BANA

also seeks judicial notice of certain documents tendered in
support of its Motion.

Plaintiffs filed their Responses to the

Motions to Dismiss on June 30, 2016, and Defendants filed their
respective Replies on July 20, 2016.

Following requests by

Plaintiffs to supplement the record and the resolution of
discovery issues, the Court took this matter under advisement on
October 10, 2016.

STANDARDS
To survive a motion to dismiss a complaint must contain
sufficient factual matter, accepted as true, to “state a claim
for relief that is plausible on its face.”
Twombly, 550 U.S. 544, 545 (2007).

6 - OPINION AND ORDER

Bell Atlantic v.

A claim has facial

plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.

Id. at 556.

“The plausibility standard is not akin to a ‘probability
requirement,’ but it asks for more than a sheer possibility that
a defendant has acted unlawfully.”

Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009)(quoting Twombly, 550 U.S. at 546).

When a

complaint is based on facts that are “merely consistent with” a
defendant's liability, it “stops short of the line between
possibility and plausibility of entitlement to relief.” Iqbal,
556 U.S. at 678 (citing Twombly, 550 U.S. at 557).
Atlantic, 550 U.S. at 555-56.

See also Bell

The court must accept as true the

allegations in the complaint and construe them in favor of the
plaintiff.

Din v. Kerry, 718 F.3d 856, 859 (9th Cir. 2013).

The pleading standard under Federal Rule of Civil Procedure
8 “does not require ‘detailed factual allegations,’ but it
demands more than an unadorned, the-defendant-unlawfully-harmedme accusation.”
U.S. at 555).

Iqbal, 556 U.S. at 678 (quoting Twombly, 550
See also Federal Rule of Civil Procedure 8(a)(2).

“A pleading that offers ‘labels and conclusions’ or ‘a formulaic
recitation of the elements of a cause of action will not do.’”
Id. (citing Twombly, 550 U.S. at 555).

A complaint also does not

suffice if it tenders “naked assertion[s]” devoid of “further
factual enhancement.”
7 - OPINION AND ORDER

Id. at 557.

“In ruling on a 12(b)(6) motion, a court may generally
consider only allegations contained in the pleadings, exhibits
attached to the complaint, and matters properly subject to
judicial notice."

Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th

Cir. 2007)(citing Jacobson v. Schwarzenegger, 357 F. Supp. 2d
1198, 1204 (C.D. Cal. 2004)).

A court, however, "may consider a

writing referenced in a complaint but not explicitly incorporated
therein if the complaint relies on the document and its
authenticity is unquestioned."

Id. (quoting Parrino v. FHP,

Inc., 146 F.3d 699,706 (9th Cir. 1998), superseded on other
grounds as stated in Abrego v. Dow Chem. Co., 443 F.3d 676 (9th
Cir. 2006)).
A pro se plaintiff's complaint "must be held to less
stringent standards than formal pleadings drafted by lawyers."
Erickson v. Pardus, 551 U.S. 89, 94 (2007).
construe pro se filings liberally.

Thus, the court must

If a plaintiff fails to state

a claim, "[l]eave to amend should be granted unless the pleading
'could not possibly be cured by the allegation of other facts,'
and should be granted more liberally to pro se plaintiffs."
Ramirez v. Galaza, 334 F.3d 850, 861 (9th Cir. 2003)(quoting
Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000)).

DISCUSSION

8 - OPINION AND ORDER

At the heart of this matter is Plaintiffs’ assertion that
AWL, the original lender named on the Deed and Note, is not a
legal entity and was not authorized to do business in the State
of Oregon at the time of Plaintiffs’ loan.

Based on that

assertion, Plaintiffs contend the Deed and Note are void and
unenforceable, that Defendants are precluded from pursuing any
foreclosure action against Plaintiffs, that Plaintiffs are
entitled to possession of their property free and clear of any
liens asserted by Defendants, and that Plaintiffs are entitled to
the return of all loan payments made by them.
I.

BANA’s Requests for Judicial Notice
BANA asks the Court to take judicial notice pursuant to

Federal Rule of Evidence 201 of documents regarding the status of
AWL submitted in support of its Motion to Dismiss.
Plaintiffs, in turn, contend the Court should not take
judicial notice of these documents because they do not meet the
requirements of Rule 201, the documents are irrelevant and
inadmissable, and notice of these documents violate the parole
evidence rule for contract interpretation.
A.

Standards
The court may take judicial notice of adjudicative

facts “capable of accurate and ready determination by resort to
sources who accuracy cannot reasonably be questioned.”
Evid. 201(b).

Fed. R.

On a motion to dismiss the court may also take

9 - OPINION AND ORDER

judicial notice of public records outside of the pleadings.
Dreiling v. American Exp. Co., 458 F.3d 942, 946 n.2 (9th Cir.
2006)(citing MGIC Idem. Corp. V. Weisman, 803 F.2d 500, 504 (9th
Cir. 1986)).
Pursuant to the “doctrine of incorporation,” a court
may also consider as evidence on a motion to dismiss those
“documents whose contents are alleged in a complaint and whose
authenticity no party questions, but which are not physically
attached to the pleading.”
54 (9th Cir. 1994).

Branch v. Tunnell, 14 F.3d 449, 453-

The Ninth Circuit in Knievel v. ESPN

extended this principle to situations in which “the plaintiff’s
claim depends on the contents of a document, the defendant
attaches the documents to its motion to dismiss, and the parties
do not dispute the authenticity of the document, even though the
plaintiff does not explicitly allege the contents of that
document in the complaint.”
B.

393 F.3d 1068, 1076 (9th Cir. 2005).

First Request for Judicial Notice (#76).
BANA requests the Court to take judicial notice of

“Business Entity Data” for AWL and Countrywide from the Oregon
Secretary of State Corporation Division database.

According to

BANA, these records show AWL was the assumed business name for
Countrywide, and Countrywide was registered to do business in
Oregon at the time the Deed and Note for Plaintiffs’ loan were
executed.
10 - OPINION AND ORDER

The Business Entity Data from the Oregon Secretary of
State regarding AWL and Countrywide are public records that can
be readily determined as accurate.
On this record, therefore, the Court grants BANA’s
Request (#76) and takes judicial notice of these documents.
C.

Second Request for Judicial Notice (#96).
BANA requests the Court to take judicial notice of the

“Loan Application Disclosure Acknowledgment” signed by Plaintiffs
on October 25, 2005; a letter from Plaintiffs dated June 22,
2012; and the California state appellate court opinion in
Vildosola v. Countrywide Home Loans, Inc., No. D066094, 2015 WL
5258687 (Cal. Ct. App., Sept. 10, 2015).
BANA contends the Disclosure Acknowledgment and letter
refute Plaintiffs’ assertion that they did not know Countrywide
was the lender on their loan.
In any event, the Loan Application Disclosure
Acknowledgment and Plaintiffs’ letter dated June 22, 2012, are
not public records, are not referenced in Plaintiffs’ Second
Amended Complaint, and are not “undisputed” as to their
authenticity.

In addition, Plaintiffs’ claims do not “depend” on

those documents.
The Vildosola opinion, however, is a public record, and
the Court considers it to the same extent that the Court
considers any other legal authority cited by a party.

11 - OPINION AND ORDER

On this record the Court denies BANA’s Request (#96) as
to these documents.
II.

Defendants’ Motions to Dismiss Plaintiffs’ Second Amended
Complaint
Defendants contend Plaintiffs fail to state a claim in their

Second Amended Complaint, and therefore, the Court should dismiss
Plaintiffs’ Second Amended Complaint as a matter of law.
A.

AWL’s Status as a Legal Entity
As noted, at the heart of Plaintiffs’ claims are their

assertions that AWL did not exist as a legal entity when the Deed
and Note were executed and that AWL was not registered to do
business in Oregon at the time of the loan.

Thus, Plaintiffs

contend the Deed and all subsequent assignments are void and
unenforceable.
To support their position, Plaintiffs attach
to their Second Amended Complaint a name search from the New
York State Division of Corporations showing an entity named
“America’s Wholesale Lender, Inc.” was registered in New York on
December 16, 2008, which was three years after the execution of
Plaintiffs’ loan in 2005.

Moreover, neither the Deed nor the

Note indicates Plaintiffs intended “America’s Wholesale Lender,
Inc.” to be the lender rather than “America’s Wholesale Lender”
(referred to as AWL herein) when they signed the Deed and Note in
2005.
Defendants, as noted, have shown AWL was the registered
12 - OPINION AND ORDER

assumed business name of Countrywide Home Loans, Inc., and the
Deed and Note signed by Plaintiffs unambiguously identify the
lender as AWL.
The Court has taken judicial notice of business records
from the Oregon Secretary of State submitted by BANA that show
AWL was the registered assumed business name for Countrywide at
the time of Plaintiffs’ loan in October 2005, and Countrywide, a
New York corporation, was registered in 2005 to do business in
Oregon.

Based on these documents, the Court concludes the

identity of AWL in the Deed and Note is not ambiguous, that AWL
was the assumed business name for Countrywide at the time, that
AWL was a legal entity at the time of this transaction, and that
AWL was authorized to do business in Oregon because it was the
assumed business name for Countrywide.
B.

Plaintiffs’ First Claim for Declaratory Judgment.
In their First Claim for Declaratory Judgment as to all

Defendants, Plaintiffs seek a judicial determination that the
Deed with AWL is void, that all of the subsequent assignments of
the Deed are void, that BONYM and Bayview do not have the
authority to foreclose on Plaintiffs’ property, and that
Plaintiffs are entitled to possession of the property free and
clear of any liens.
Plaintiffs’ request for a declaratory judgment is, as
noted, premised on Plaintiffs’ contention that the Deed in

13 - OPINION AND ORDER

question is void because AWL was not a legal entity at the time
and was not authorized to do business in Oregon.

Plaintiffs,

therefore, assert the subsequent assignments of the Deed by MERS
to BONYM in February 2012 and by Countrywide to BONYM in 2015 are
invalid, and, thus, BONYM and Bayview do not have any authority
to foreclose on the loan.

Plaintiffs also contend any Note held

by BONYM was forged because Plaintiffs have received copies of
the Note that reflect it was not properly endorsed to BONYM.
Plaintiffs also contend any assignments of the Deed are invalid
because the Deed and Note themselves are both invalid.
Defendants contend Plaintiffs fail to state a claim for
declaratory relief because the Deed and Note are not invalid.
Defendants argue BONYM’s status as beneficiary derives from its
status as the note-holder and even if the assignment from MERS to
BONYM was ineffective, the subsequent recorded assignment from
Countrywide to BONYM was valid.

Defendants also argue the

forgery issue regarding the Note is a “red herring.”

Defendants

further contend Plaintiffs do not have standing to challenge the
assignments of the Deed.
1.

Declaratory Judgment

The Declaratory Judgment Act provides:

“In a case of

actual controversy within its jurisdiction . . . any court of the
United States . . . may declare the rights and other legal
relations of any interested party seeking such declaration,

14 - OPINION AND ORDER

whether or not further relief is or could be sought.”
§ 2201(a).

28 U.S.C.

The phrase “a case of actual controversy” refers to

the types of “cases” and “controversies” justiciable under
Article III of the United States Constitution.

MedImmune, Inc.

v. Genentech, Inc., 549 U.S. 118, 127 (2007).

The Declaratory

Judgment Act does not create a stand-alone cause of action.

See

Franchise Tax Bd. Of State of Cal. v. Constr. Laborers Vacation
Trust for S. California, 463 U.S. 1, 15 (1983)(“‘[T]he operation
of the Declaratory Judgment Act is procedural only.’”)(quoting
Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (1950)).
See also Graham v. U.S. Bank, Nat’l Assn., No. 3:15-cv-0990-AC,
2015 WL 10322087, at *13 (D. Or. Dec. 2, 2015)(“The Declaratory
Judgment Act . . . does not create a cause of action; instead, it
creates a remedy for existing causes of action.”).
In MedImmune the Supreme Court summarized the
difference “between those declaratory-judgment actions that
satisfy the case-or-controversy requirement and those that do
not” as follows:

“Basically, the question in each case is

whether the facts alleged, under all the circumstances, show that
there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and reality to
warrant the issuance of a declaratory judgment.”
127.

549 U.S. at

The Court also described a dispute that satisfies the case-

or-controversy requirement as one that is “definite and concrete,

15 - OPINION AND ORDER

touching the legal relations of parties having adverse legal
interests” to the degree that the dispute is “‘real and
substantial’” and “admi[ts] of specific relief through a decree
of a conclusive character, as distinguished from an opinion
advising what the law would be upon a hypothetical state of
facts.”

Id. (quotation omitted).
2.

Analysis

The Oregon Supreme Court in Brandrup v. ReconTrust Co.,
N.A. held for purposes of the Oregon Trust Deed Act, “the
‘beneficiary’ is the lender to whom the obligation that the trust
deed secures is owed or the lender’s successor in interest.”
Or. 668, 689 (2013).

353

The court held “an entity like MERS, which

is not a lender, may not be a trust deed’s ‘beneficiary,’ unless
it is the lender’s successor in interest.”

Id.

The Oregon

Supreme Court in Niday v. GMAC Mortgage, LLC, held, however, even
though MERS cannot act as a beneficiary in its own right, it may
establish that it was the beneficiary’s agent and able to act in
that capacity.

353 Or. 648, 658 (2013).

In Christie v. Bank of New York Mellon, N.A., the
plaintiff alleged the “unauthorized and inauthentic” assignments
of her loan rendered the Note and Deed of Trust void and
precluded the defendants from collecting the debt.

The Ninth

Circuit concluded the district court properly dismissed the
plaintiff’s claim for declaratory relief and held the plaintiff
16 - OPINION AND ORDER

did not have standing to challenge irregularities in the
assignment of her Note or Deed of Trust because those instruments
are negotiable and her obligations thereunder remained unchanged
even if her creditor changed.
2015).

617 F. App’x. 680, 681 (9th Cir.

The court also concluded the plaintiff did not “have

standing to challenge the late assignment of her loan to the
CWALT Trust under New York law since [plaintiff] is not an
intended beneficiary of the CWALT Trust.

Id. at 682.

Here this Court has concluded AWL was a legal entity at
the time of the loan, and, therefore, the Deed executed between
AWL and Plaintiffs is not invalid as Plaintiffs allege.

Although

it could be argued that MERS did not have the authority to assign
the Deed in 2012, the subsequent assignment by Countrywide to
BONYM in 2015 was properly recorded prior to any foreclosure
action by BONYM or Bayview.

The Court also notes Plaintiffs lack

standing to challenge the assignments of the Deed because they
were not the intended beneficiaries of the assignment.
On this record the Court concludes, therefore, that
Plaintiffs have failed to state a claim for declaratory relief
that is plausible on its face, and, accordingly, the Court grants
Defendants’ Motions to Dismiss Plaintiffs’ First Claim.
C.

Plaintiffs’ Second Claim for Violation of Oregon’s
Unlawful Trade Practices Act (OUTPA).
Plaintiffs bring their Second Claim for violation of

OUTPA against Defendants BONYM and Bayview only.
17 - OPINION AND ORDER

Plaintiffs

allege BONYM and Bayview violated § 646.607 and § 646.608 by
omitting material facts and making false representations in their
January 30, 2015, Intent to Foreclose letter; omitting material
facts, making false statements, and failing to produce or
producing incomplete or false documents in the OFAP process;
seeking to enforce the Note and Deed knowing they were void;
seeking to enforce the April 2015 Assignment of Trust Deed
knowing it was forged; recording a Substitution of Trustee and
Notice of Default and Sale when BONYM, Bayview, and CRC1 were not
legally entitled to do so; and engaging in allegedly criminal
misconduct.
BONYM and Bayview contend there is not a private right
of action under § 646.607 and that Plaintiffs fail to allege
facts sufficient to constitute a claim under § 646.608.
1.

Section 646.607

Section 646.607(1) provides a person engages in an
unlawful trade practice if the person “employs any unconscionable
tactic in connection with selling, renting or disposing of real
estate, goods or services, or collecting or enforcing an
obligation.”

Oregon Revised Statute § 86.741(3) provides

violation of the provisions of the OFAP process, Oregon Revised

1

Although Plaintiffs allege the appointment of CRC as
successor trustee was improper and invalid, they do not set out
facts that specifically support the allegation that CRC violated
OUTPA.
18 - OPINION AND ORDER

Statutes, § 86.726, et seq., constitutes unlawful practices under
§ 646.607.
The Oregon state appellate court has held claims under
Oregon Revised Statute § 646.607 may be prosecuted only by the
State of Oregon, and Oregon law “does not create a private right
of action for violations of ORS 646.607.”

Norton v. Nelson, 2525

Or. App. 611, 619-20 (2012).
The Court concludes, accordingly, that Plaintiffs’
claim against BONYM and Bayview for violations of § 646.607,
including alleged violations of the OFAP process, fails to state
a claim.
2.

Section 646.608

Section 646.608 specifies unlawful trade practices
other than those set out in § 646.607 and includes the following
conduct alleged in Plaintiffs’ Second Amended Complaint:

the use

of “deceptive representations in connection with real estate,
goods or services” (¶(1)(d)); making “false or misleading
representations concerning credit availability or the nature of
the transaction or obligation incurred” (¶(1)(k)); and “any other
unfair or deceptive conduct in trade or commerce” (¶(1)(u)).
In their Second Claim Plaintiffs’ allegations again are
based on their contention that AWL was not a legal entity at the
time; that the Deed and Note, therefore, are void; and, as a
result, that subsequent foreclosure documents are invalid.

19 - OPINION AND ORDER

Moreover, Plaintiffs contend Bayview omitted material facts or
made false statements in its January 30, 2015, Notice of Intent
to Foreclose by failing to name the lender and noteholder
specifically.
As noted, the Court has concluded Plaintiffs’
allegations fail to establish that AWL is not a legal entity or
that the Deed and Note at issue are invalid.

Thus, to the extent

that Plaintiffs’ allegations are premised on the theory

that AWL

was not a legal entity at the time of the loan and that all
subsequent transactions were invalid, such allegations do not
have any merit and, therefore, do not adequately state a claim
that Defendants BONYM and Bayview violated § 646.608.
On this record the Court concludes Plaintiffs’ Second
Claim that Defendants BONYM and Bayview violated the provisions
of OUTPA is not plausible on its face, and, accordingly, the
Court grants the Motion to Dismiss of Defendants BONYM and
Bayview as to Plaintiffs’ Second Claim.
D.

Plaintiffs’ Third Claim for Violation of RICO.
Plaintiffs bring their Third Claim against all

Defendants for violation of RICO, 18 U.S.C. § 1962(c).
Plaintiffs’ Third Claim is based on the premise that the Note,
Deed, Assignment of Deed, Appointment of Successor Trustee, and
Notice of Default are void and/or forgeries.
Defendants, in turn, contend Plaintiffs cannot maintain

20 - OPINION AND ORDER

a RICO claim because the loan documents are valid and
enforceable, there is not a private right of action for mail
fraud, and Plaintiffs fail to allege the elements required to
state a RICO claim.
1.

RICO

To establish a prima facie claim under RICO, a
plaintiff must allege:

(1) a substantive predicate violation of

18 U.S.C. § 1962, (2) injury to his or her business or property,
and (3) a causal connection between the racketeering activity and
the injury.

See Miller v. Yokohama Tire Corp., 358 F.3d 616, 620

(9th Cir. 2004).

"To state a claim under § 1962(c), a plaintiff

must allege '(1) conduct (2) of an enterprise (3) through a
pattern (4) of racketeering activity.'"

Odom v. Microsoft, 486

F.3d 541, 547 (9th Cir. 2007)(quoting Sedima, S.P.R.L. v. Imrex
Corp., 473 U.S. 479, 496 (1985)).

“Racketeering activity”

includes specific predicate acts such as mail fraud or wire
fraud.

18 U.S.C. § 1961(1).

To establish a “pattern of

racketeering activity” a plaintiff must allege the existence of
at least two predicate acts.

18 U.S.C. § 1961(5).

When those

acts are predicated on fraud, the allegations must “detail with
particularity the time, place, and manner of each act of fraud,
plus the role of each defendant in each scheme.”

Lancaster

Community Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397, 405
(9th Cir. 1991).

See also Sanford v. MemberWorks, Inc., 625

21 - OPINION AND ORDER

F.3d 550, 558 (9th Cir. 2010).
2.

Analysis

As noted, Plaintiffs contend Defendants violated RICO
when they attempted to foreclose on Plaintiffs’ property in
reliance on documents that were void and that Defendants’
foreclosure activities based on those documents constitute mail
and wire fraud.
Courts have concluded mail-and-wire fraud statutes do
not confer a private right of action.

See, e.g., Idowu v.

Astheimer, No. C 10-02672, 2011 WL 89965, at *2 (N.D. Cal.
Jan. 11, 2011)(“mail and wire fraud statutes do not confer a
private right of action.”)(citations omitted).

See also Wilcox

v. First Interstate Bank, 815 F.2d 522, 533, n.1 (9th Cir.
1987)(“there is no private right or action for mail fraud under
18 U.S.C. § 1341")(Boochever, J., dissenting)).
Even if a private right of action exists, Plaintiffs’
Third Claim is premised on the invalidity of the Deed, Note, and
subsequent documents relating to the foreclosure of their
property.

As noted, the Court has concluded any claim based on

the alleged “invalidity” of the Deed and Note is without merit.
On this record the Court concludes Plaintiffs’ Third
Claim fails to state a claim that is plausible on its face, and,
accordingly, the Court grants Defendants’ Motions to Dismiss as
to Plaintiffs’ Third Claim.
22 - OPINION AND ORDER

E.

Plaintiffs’ Fourth Claim for Violation of ORICO.
Plaintiffs bring their Fourth Claim against all

Defendants for violation of ORICO, Oregon Revised Statute
§ 166.715.

Similar to their Third Claim, Plaintiffs bring this

ORICO claim as to Defendants’ foreclosure activities that were
allegedly based on invalid and/or forged documents.
As noted, the Court has concluded any claim based on
the alleged “invalidity” of the Deed and Note is without merit.
On this record the Court concludes Plaintiffs’ Fourth
claim fails to state a claim that is plausible on its face, and,
accordingly, the Court grants Defendants’ Motions to Dismiss as
to Plaintiffs’ Fourth Claim.
F.

Plaintiffs’ Fifth Claim for Violation of the Consumer
Credit Protection Act.
Plaintiffs bring their Fifth Claim for violation of the

Consumer Credit Protection Act, 15 U.S.C. § 1601, against
Defendants BANA and BONYM only.

Plaintiffs contend BANA violated

the requirements of 15 U.S.C. § 1641(g)(1) when it failed to
notify Plaintiffs within 30 days that it assigned the Deed to
BONYM on April 23, 2015.

Second Am. Compl. at ¶ 166.

Plaintiffs

further contend BONYM violated § 1641(g)(1) when it failed to
notify Plaintiffs “that ownership of the Loan had been
transferred from [BONYM] to BANA as declared in Bayview’s
October 6, 2015 letter to Plaintiffs.”
¶ 169.
23 - OPINION AND ORDER

Second Am. Compl. at

BANA argues it was not the named creditor in the
April 23, 2015, assignment, and, therefore, it did not have any
obligation to notify Plaintiffs of such assignment.

Plaintiffs

concede in their Response that the allegations in their Fifth
Claim are insufficient as to BANA and seek leave to amend their
Fifth Claim to assert BANA failed to notify Plaintiffs that BANA
was the owner of the loan as indicated in Bayview’s letter of
October 6, 2015.
BONYM contends Plaintiffs’ allegations in their Second
Amended Complaint that acknowledge BONYM was owner of the loan
from origination undermines Plaintiffs’ argument that BONYM
failed to give notice of a transfer to the “true” owner.
Moreover, Bayview’s letter of October 6, 2015, clearly identified
BONYM as the owner of the loan.

Plaintiffs concede in their

Response that the allegations in their Fifth Claim are
insufficient as to BONYM and seek leave to amend their Fifth
Claim to assert BONYM failed to notify Plaintiffs that the loan
had been transferred to BONYM within 30 days of the transaction
on April 23, 2015.
1.

Consumer Credit Protection Act

The Consumer Credit Protection Act requires, in
addition to other disclosures, that “not later than 30 days after
the date on which a mortgage loan is sold or otherwise
transferred or assigned to a third party, the creditor that is

24 - OPINION AND ORDER

the new owner or assignee of the debt shall notify the borrower
in writing of such transfer.”
2.

15 U.S.C. § 1641(g)(1).

Analysis

Based on Plaintiffs’ concessions, the Court concludes
Plaintiffs fail to state a claim against BANA and BONYM for
violation of the Consumer Credit Protection Act that is plausible
on its face.
The issue remains, however, whether Plaintiffs’
proposed amendments to their Fifth Claim would be sufficient to
state a claim for relief.

BANA contends Plaintiffs’ proposed

amendment as to BANA would be insufficient as the statute
requires the actual new creditor rather than the entity that the
borrower believes is the new creditor to provide the notice of
transfer.

BONYM contends Plaintiffs should not be allowed a

third opportunity to amend their Complaint because Plaintiffs
alleged BONYM has owned the loan since its origination, which is
inconsistent with Plaintiffs’ proposed amendment.

See Second Am.

Compl. at ¶¶ 51-57.
On this record the Court concludes Plaintiffs’ proposed
amendment of their Fifth Claim as to BANA would not cure the
deficiencies in light of the fact that BANA was not the new
creditor under either the April 2015 assignment nor according to
Bayview’s letter of October 2015.
The Court also concludes Plaintiffs’ proposed amendment

25 - OPINION AND ORDER

of their Fifth Claim as to BONYM would not cure the deficiencies.
Plaintiffs continue to allege the damages they suffered were the
“payments made to a non-existent Lender” as a result of BONYM’s
failure to notify them it was the new creditor as a result of the
April 2015 assignment.

The Court has determined AWL was a

legitimate entity at the time that the Deed and Note were
executed in 2005 and that Plaintiffs lack standing to challenge
the subsequent assignments of the Deed.

Plaintiffs, therefore,

have not stated any grounds to support an award of damages
proximately caused by any alleged failure of BONYM to notify them
of the transfer.
On this record the Court concludes Plaintiffs fail to
state a claim against Defendants BANA and BONYM for violation of
the Consumer Credit Protection Act, and, therefore, any further
amendment would be futile.
G.

Plaintiffs’ Sixth Claim for Promissory Estoppel.
Plaintiffs bring their Sixth Claim for promissory

estoppel against Defendant BANA only.

Plaintiffs allege BANA

made false and misleading representations “that help was
available if [Plaintiffs’] Loan was in default, but not if it was
current,” and these statements were made “in an effort to get the
Plaintiffs to default on their Loan, and keep them in default so
[BANA] could accrue and collect additional fees associated with
defaulted loans and their liquidation.”

26 - OPINION AND ORDER

Relying on these

misrepresentations, Plaintiffs stopped making payments on their
loan “so they could get help.”
BANA contends Plaintiffs’ allegations fail to allege
clear, definite, unambiguous, and essential terms constituting a
“promise.”
1.

Promissory Estoppel

In order to state a claim for promissory estoppel, a
plaintiff must allege a promise was made.

Rick Franklin Corp. v.

State ex. rel. Dep't of Transp., 207 Or. App. 183, 190 (2006).
See also Barnes v. Yahoo! Inc., 570 F.3d 1096, 1106 (9th Cir.
2009) (citation omitted).

Oregon law does not require a

“definite” promise to allow recovery under the theory of
promissory estoppel.

See Neiss v. Ehlers, 135 Or. App. 218, 228

(1995)(“In our view, the better reasoning supports the conclusion
that promissory estoppel can apply, under appropriate
circumstances, to promises that are indefinite or incomplete,
including agreements to agree.”).

The plaintiff must, however,

allege a promise that reasonably would have been expected to
“induce action or forbearance on the part of the promisee.”
Cocchiara v. Lithia Motors, Inc., 353 Or. 282, 291 (2013).
2.

Analysis

Here Plaintiffs allege in their Second Amended
Complaint that BANA offered Plaintiffs a loan modification in
August 2012, but BANA would not provide “detailed financial
27 - OPINION AND ORDER

accounting” of the modification or the terms and conditions.
Plaintiffs, therefore, refused the offer because they were unable
to determine whether the proposed modification would violate the
terms of their bankruptcy.

Plaintiffs do not allege they

“agreed” to any loan modification, but only that BANA “falsely
misrepresented” that “help was available if” their loan was in
default.

Even viewing Plaintiffs’ allegations as true, the Court

notes BANA’s alleged statement does not constitute a “promise”
that could “reasonably have been acted on or foreseen as an
inducement to action.”

See Neiss, 135 Or. App. at 229.

On this record the Court concludes Plaintiffs fail to
state a claim for promissory estoppel that is plausible on its
face, and, accordingly, the Court grants BANA’s Motion to Dismiss
Plaintiffs’ Fifth Claim against it.
III. Leave to Amend Complaint.
Federal Rule of Civil Procedure 15(a) provides a party may
amend a pleading after a responsive pleading has been filed only
by leave of court unless the opposing party consents to the
amendment.

Rule 15(a), however, also provides leave to amend

“shall be freely given when justice so requires.”
to be applied with “extreme liberality.”

This policy is

Moss v. United States

Secret Serv., 572 F.3d 962, 972 (9th Cir. 2009).
The Supreme Court has recognized several factors that a
district court should consider when determining whether justice

28 - OPINION AND ORDER

requires the court to grant leave to amend.

Those factors

include
undue delay, bad faith or dilatory motive on the part
of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment,
futility of the amendment.
Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th
Cir. 2003)(quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).
The factor that carries the greatest weight is whether the
amendment will prejudice the opposing party.

Id.

“Absent

prejudice or a strong showing of any of the remaining Foman
factors, there exists a presumption under Rule 15(a) in favor of
granting leave to amend.”

Id.

“Delay alone is insufficient to

justify denial of leave to amend; the party opposing amendment
must also show that the amendment sought is futile, in bad faith
or will cause undue prejudice to the opposing party.”

Jones v.

Bates, 127 F.3d 839, 847 n.8 (9th Cir.1997)(citing United States
v. Webb, 655 F.2d 977, 980 (9th Cir. 1981)).

See also Quantum

Tech. Partners II, L.P. v. Altman Browning and Co., No. 08-CV376-BR, 2009 WL 1795574, at *19 (D. Or. June 23, 2009)(same).
The party who opposes amendment bears the burden to show
prejudice.

Eminence Capital, 316 F.3d at 1052 (citing DCD

Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987)).
Further amendment to a complaint is futile if “‘no set of
facts can be proved under the amendment . . . that would
29 - OPINION AND ORDER

constitute a valid and sufficient claim.’”

Sweaney v. Ada Cnty.,

Idaho, 119 F.3d 1385, 1393 (9th Cir. 1997)(quoting Miller v.
Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988)).

See

also Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 522, 532 (9th
Cir. 2008)(proposed amendment to a complaint is futile when the
“complaint could not be saved by any amendment.”).

A plaintiff

should be afforded an opportunity to test his claim on the merits
unless it appears beyond doubt that the proposed amended
complaint would be dismissed for failure to state a claim under
Federal Rule Civil Procedure 12(b)(6).
214.

See Miller, 845 F.2d at

See also AmerisourceBergen Corp. v. Dialysist W., Inc., 465

F.3d 946, 957 (9th Cir. 2006).
Here the Court concludes it would be futile to grant
Plaintiffs leave to amend their Complaint after already having
had three opportunities to state a cognizable claim.

As noted,

the premise at the heart of each of Plaintiffs’ claims is that
AWL, the original lender named on the Deed and Note executed by
Plaintiffs over ten years ago, is not a legal entity and was not
authorized to do business in the State of Oregon at the time of
Plaintiffs’ loan.

Based on that premise, Plaintiffs allege the

Deed and Note signed by them are void; all subsequent activity
related to the transfer, assignment, and handling of their loan
is invalid; Plaintiffs are entitled to ownership of the property
free and clear; and all payments made by Plaintiffs should be

30 - OPINION AND ORDER

refunded to them.
As noted, the Court has taken judicial notice of facts that
refute the premise of each of Plaintiffs’ claims and that
establish AWL was a legal entity and the Deed and Note are valid.
Moreover, there is not any showing in the record that there is
any possibility that Plaintiffs could discover additional facts
that would remedy the deficiencies in Plaintiffs’ Second Amended
Complaint.
Accordingly, on this record the Court dismisses Plaintiff’s
Second Amended Complaint with prejudice.

CONCLUSION
For these reasons, the Court GRANTS Defendant BANA’s First
Request for Judicial Notice (#76) and DENIES its Second Request
for Judicial Notice (#96).

The Court also GRANTS Defendants’

Motions to Dismiss (#75, #79) and DISMISSES Plaintiffs’ Second
Amended Complaint with prejudice.
IT IS SO ORDERED.
DATED this 13th day of December, 2016.
/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge

31 - OPINION AND ORDER